The Puzzle

The consequence of the phaseout of electric vehicle subsidies in Germany on the competitiveness of the German automotive industry.

Zooming out:

• What is the relationship between competitiveness and decarbonisation?
• What are the factors/actors dictating this relationship? And, who is affected by this trade-off?

The Case

You plan to use the exogenous shock of the phaseout of electric vehicle subsidies in Germany to study the impact of removing a decarbonisation policy on:

• Consumer behaviour (sales)
• Firms’ behaviour (cars production and investment)
• Firms’ market power (market shares)

General Comments

Strengths:

• Timely and relevant –> topic and research design
• Data-driven: as you show in your figures there’s clearly something going on.
• Clear exogenous variation: allows you to identify potential effects.

Weaknesses:

• Less clear theory or mechanism.

• Almost too data driven: I am sure there is something going on but HOW and WHY is it happening?

Theory and Definitions

• Define your key terms:
  • What do you mean by competitiveness?
  • What do you mean by decarbonisation?
• Are these two mutually exclusive or complementary?
• What is your theoretical expectation about their interaction?
  • from one of the simulations it seems that competition, in a specific setting and under certain assumptions, could positively affect decarbonisation, but you seem to suggest the opposite.

Causal Questions

• What is the causal mechanism?
• Which one is X and which one is Y?
• Define a clear causal question
• Without it, it’s hard to choose an appropriate research design.

flowchart LR
  A[Decarbonisation?] --> B(Competitiveness?)
  B --> A

Design

• The research designs are all credible and feasible
• Hard to pick a design if you don’t have a clear question
• For sure this shock has an effect on something, but:
  • which something do you care about and why?
  • what does this effect mean?
  • what is the mechanism behind it?

Linking to Empirics

• Tell a story with your data.
  • Why are you showing these figures? Use them to tell us your story
• Tell us your story. What do you think is going on?

Relevance and Framing

• Why does this matter?
• What can we learn from this case (Germany/subsidies) that can help us understand decarbonisation and competitiveness at large
• Leaving behind a crucial actor: institutions
  • How do they shape the relationship between decarbonisation and competitiveness?
  • They ultimately dictate the rules of the game and the priorities
    • –> compatitiveness >> decarbonisation?

flowchart LR
  A{Institutions *Policy*} --> B(Firm Behaviour *Production and Investment*)
  A --> C(Consumer Behaviour *Sales*)